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olga55 [171]
3 years ago
8

Bovine Company, a wholesale distributor of DVDs, has been experiencing losses for some time, as shown by its most recent monthly

contribution format income statement below:
Sales $1,500,000 Variable expenses 588,000 Contribution margin 912,000 Fixed expenses 945,000 Net operating loss $ (33,000)
In an effort to isolate the problem, the president has asked for an income statement segmented by geographic market. Accordingly, the Accounting Department has developed the following data:
Geographic Market South Central North Sales $400,000 $600,000 $500,000 Variable expenses as a percentage of sales 52% 30% 40% Traceable fixed expenses $240,000 $330,000 $200,000
Required: i. Prepare a contribution format income statement segmented by geographic market, as desired by the president. ii. The company’s sales manager believes that sales in the Central geographic market could be increased by 15% if monthly advertising were increased by $25,000. Would you recommend the increased advertising? Show computations to support your answer.
Business
1 answer:
german3 years ago
3 0

Solution :

Particulars                   \text{Total company}          \text{South  }           \text{Central}          \text{North}

Sales                           $1,500,000              $400,000      $600,000     $500,000

Variable expenses        588,000                208000       180000     200000

Contribution margin      912000                  192000        420000    300000

Traceable fixed          770,000                    240,000      330,000    200,000

expenses          

Geographic market      142,000          -$48000              $90000       $100000

segment expenses

Common fixed

expenses not traceable

to geographic markets

Net operating income

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Answer:

Comparative Advantage: A country has a comparative advantage in producing a commodity if the opportunity cost of producing that commodity in terms of other commodity is lower in that country as compared to the other country.

For determining comparative advantage, countries compare their good's opportunity cost with the other country's goods opportunity cost.

7 0
3 years ago
A coupon bond that pays interest of 4% annually has a par value of $1,000, matures in 5 years, and is selling today at $785. The
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Answer:

Actual Yiel to maturity is 9.3%

Explanation:

Yield to maturity is the annual rate of return that an investor receives if a bond bond is held until the maturity.

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Yield to maturity = [ $40 + ( $1,000 - $785 ) / 5 ] / [ ( 1,000 + $785 ) / 2 ]

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Theory of production​
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Answer:

Theory of production, in economics, an effort to explain the principles by which a business firm decides how much of each commodity that it sells (its “outputs” or “products”) it will produce, and how much of each kind of labour, raw material, fixed capital good, etc., that it employs (its “inputs” or “factors of .

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